2017 has already exceeded the total investment value for 2016, which stood at 17.5 billion USD, and also surpassed 2015’s record investment value of 19.8 billion USD. This year is now positioned to be the best year for private equity (PE) in India. The first three quarters recorded the highest investment activity with 20 billion USD invested across 477 deals, a 69% increase in value despite a 14% decline in deal volume as compared to the same period in 2016. The top 15 deals for the nine months of 2017 accounted for over 50% of the total deal value.
The third quarter of this year alone witnessed investments worth almost 6 billion USD across 127 deals, a 73% increase in value despite a 25% decline in volume as compared to the same period last year.
The Technology space garnered the highest investment value with 3.2 billion USD, having recorded the largest PE investment with Softbank’s 2.5 billion USD investment in Flipkart. Financial services recorded investments worth 1.2 billion USD across 11 deals, with non-banking financial companies (NBFCs)/micro finance institutions (MFIs) continuing to see activity. The Energy space, dominated by renewables, witnessed investments worth 0.4 billion USD across 4 deals. The Fast-moving consumer goods (FMCG) space, specifically cosmetic companies, attracted investor interest with 0.2 billion USD invested across three deals. The Healthcare sector remained stable, with 0.4 billion USD invested across 13 deals.
"Despite a dip in PE investments across sectors, the technology sector saw an upward trend in Q3 2017 compared to the previous quarter. The IT & ITeS industry continued to account for a large share of overall deal value despite a fall in volumes, as funding was mainly concentrated in leading companies that are now relatively established in their respective sectors. Although investors have become selective in their investments, the digital space, comprising the cloud, artificial intelligence and robotics, will attract a lot of attention going forward. At a time when the Indian IT sector is focusing on reskilling its existing workforce in order to adapt to the technological disruptions, home-grown start-ups are driving innovation in the industry by collaborating with global software giants to build niche solutions for the Indian market."
Global TMT Tax Leader and Technology Sector Leader